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SABIC Stock (Tadawul: 2010)

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sabic stock tadawul: 2010
09 May 2024

Despite a grim 2023, SABIC stock remains very popular among Saudia investors and top-performing international funds. While you can buy SABIC shares directly, sometimes it is worth considering an ETF with SABIC representation. 

SABIC stock (Tadawul: 2010) has gained significant attention from investors due to the company's strong financial performance, diversified product portfolio, and strategic partnerships with major global companies.  

SABIC's shares are also included in various global indices and exchange-traded funds (ETFs) that track the performance of the chemical sector, such as the iShares MSCI Saudi Arabic ETF (KSA).  

SABIC Stock (Tadawul: 2010) - Research and Ratings

  • Is SABIC stock undervalued compared to its fair value, analyst forecasts and its price relative to the market?  
  • What is the analyst's 12-month SABIC stock price forecast? 
  • What are SABIC’s future growth expectations? 
  • How has SABIC stock performed over the past 5 years? 
  • Should you buy SABIC shares or invest in ETFs with "2010" representation?

    

Understanding SABIC Stock: A brief history 

SABIC, also known as Saudi Basic Industries Corporation, is a global chemical manufacturing company based in Saudi Arabia. Founded in 1976, SABIC has grown to become one of the largest petrochemical companies in the world. In 2021, SABIC's shares were listed on the Saudi Stock Exchange (Tadawul) under the ticker symbol "2010". 

As one of the most valuable companies in the Middle East, SABIC stock is held by a diverse range of investors, including institutional and individual investors, as well as sovereign wealth funds. 

70% of the company's shares are owned by Saudi Aramco, with the remaining 30% publicly traded on the Saudi stock exchange. Since its founding in 1976, SABIC has grown rapidly and now operates in around 50 countries with over 31,000 employees. 

SABIC’s business activities are divided into three segments historically: 

  • Creation: SABIC was created by royal decree in 1976 to turn oil by-products into valuable commodities for export and local downstream industries, transforming wasted gas into eco-friendly materials. 
  • Development: During the late 1970s and early 1980s, Al-Jubail transformed into a modern industrial city. Joint ventures with Hadeed, Al-Bayroni, and Ar-Razi began production in 1983, followed by others in 1985. SABIC expanded globally in 2002 with the acquisition of DSM's petrochemical business, and later with the acquisition of Huntsman Petrochemicals (UK) and GE Plastics. Today, SABIC operates through three Strategic Business Units and one standalone organization, Metals (Hadeed), and continues to explore global investment opportunities. 
  • Emerge: SABIC's growth has never stopped since its inception. In 1985, the company's total production was 6.3 million metric tons, reaching 58 million metric tons in 2021. In the span of just 46 years, SABIC has become the second most valuable brand in the chemical industry*, with a vision to be the preferred world leader in chemicals. 

SABIC shares are distributed among 4 categories:  

  • Public Companies: 70.0% 
  • General Public: 26.1% 
  • Institutions: 3.9% 
  • Individual Insiders: 0.00245% 

The top 25 shareholders own 73.66% of the company, while the top 5 shareholders are:

  • Saudi Arabian Oil Company (Aramco Co.) - 70% 
  • The Vanguard Group, Inc. - 1.21% 
  • BlackRock, Inc. - 1.0% 
  • Dimensional Fund Advisors LP - 0.36% 
  • Geode Capital Management, LLC - 0.2% 

SABIC Stock - Fundamental Analysis and Financial Ratings 

See the latest SABIC stock price analysis, including valuation, future growth, past performance, and more to help you make more informed investing decisions. 

Valuation 

Is SABIC stock undervalued compared to its fair value, analyst forecasts, and its price relative to the market? 

  • Significantly Below Fair Value: SABIC stock is trading below fair value by more than 20%.
  • Price-To-Sales vs Peers: SABIC stock is good value based on its Price-To-Sales Ratio (1.7x) compared to the peer average (3x).
  • Price-To-Sales vs Industry: SABIC stock is expensive based on its Price-To-Sales Ratio (1.7x) compared to the Asian Chemicals industry average (1.3x).
  • Price-To-Sales vs Fair Ratio: SABIC stock is good value based on its Price-To-Sales Ratio (1.7x) compared to the estimated Fair Price-To-Sales Ratio (4.6x).

Future Growth 

Saudi Basic Industries is forecast to grow earnings and revenue by 58.3% and 5% per annum respectively. EPS is expected to grow by 53.3% per annum. Return on equity is forecast to be 8.6% in 3 years.

  • SABIC's forecast earnings growth (58.3% per year) is below the savings rate (14%). 
  • SABIC's earnings (58.3% per year) are forecast to grow faster than the Saudi market (6% per year). 
  • SABIC's earnings are expected to grow significantly over the next 3 years.
  • SABIC's revenue (5% per year) is forecast to grow slower than 20% per year. 

Past Performance 

How has SABIC stock performed over the past 5 years? 

  • SABIC shares have a large one-off loss of SAR1.9B impacting its last 12 months of financial results to 31st December, 2023.
  • SABIC shares' current net profit margins (2.9%) are lower than last year's (8.6%). 
  • SABIC shares earnings have grown by 0.3% per year over the past 5 years. 
  • SABIC shares have had negative earnings growth over the past year, so it can't be compared to its 5-year average. 
  • SABIC shares had negative earnings growth (-91.7%) over the past year, making it difficult to compare to the Chemicals industry average (-63.5%). 
  • SABIC shares Return on Equity (1.9%) is considered low. 

Financial Health  

What is SABIC's financial position?  

  • SABIC's short-term assets (SAR100.6B) exceed its short-term liabilities (SAR52.8B). 
  • SABIC's short-term assets (SAR100.6B) exceed its long-term liabilities (SAR46.3B). 
  • SABIC has more cash than its total debt. 
  • SABIC's debt-to-equity ratio has reduced from 21% to 14.3% over the past 5 years. 
  • SABIC's debt is well covered by operating cash flow (87.4%). 
  • SABIC earns more interest than it pays, so coverage of interest payments is not a concern.

Dividend 

SABIC is a company that pays dividends and currently offers a yield of 4.06%. 

  • SABIC's dividend (4.06%) is higher than the bottom 25% of dividend payers in the Saudi market (1.56%). 
  • SABIC's dividend (4.06%) is in the top 25% of dividend payers in the Saudi market (4.79%). 
  • SABIC's dividend payments have been volatile in the past 10 years. 
  • SABIC's dividend payments have fallen over the past 10 years.  

SABIC Stock Price Forecast 

What is the analyst 12-month SABIC stock price forecast, and do we have any statistical confidence in the consensus price target from analysts? 

SABIC Stock Price Forecast 12 month

Source: simplywall.st 

According to Simplywall.st, the SABIC stock 12-month target price is less than 20% higher than the current share price. 

Wallet investor site suggests that the price of SABIC stock will decline in 2024 compared to the current price, ending the year at an average price of 79.701 SAR. 

There are no 5-year SABIC shares price forecasts and price predictions. 

Important: When considering SABIC's fundamental analysis, financial rating and price predictions, it’s important to remember that high market volatility and changing economic environment makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their ratings and predictions wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose. 

SABIC Stock Price - Technical Analysis  

SABIC's stock price has been trading within a sideways channel since May 2022, as depicted in the weekly chart below, despite multiple attempts to breach the 0.236 Fibonacci retracement level.

SABIC Stock Price - Technical Analysis 

Nonetheless, there are indications that the price has finally formed a double bottom pattern at the key support level of 75.3 Saudi riyals. If this level holds and the price successfully surpasses the 91.10 Saudi riyal mark, it may prompt breach speculators to target the resistance levels at 100.60 and 108.4 Saudi riyals, respectively!

How to Invest in SABIC Stock 

Some investors want to take an active hand in managing their investments, while others prefer to set it and forget it. Your preference may change but decide on an approach to get started. 

For most people, stock market investing means choosing among these two investment types: 

Individual SABIC shares  

If you’re after a specific company, you can buy a single share or a few shares to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes significant investment and research. 

If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day. 

Traditional stockbrokers allow you to invest in local stocks. However, you might not be able to invest in international stocks listed on the major stock exchanges, global ETFs, and other assets. 

ETFs with SABIC holdings 

SABIC stock (or any single stock, for that matter) can be a very volatile investment. You can manage the risk you see extreme highs and lows by diversifying your investment holdings. An ETF, for instance, contains a basket of individual stocks. When you invest in a fund, you also own small pieces of each of those companies. 

If you want an ETF with Alahli representation, you might consider iShares MSCI Saudi Arabia ETF (KSA). BlackRock's iShares is the largest provider of ETFs as calculated by assets under management. 

ETFs with SABIC holdings
The fund can be The fund can be suitable for Arab and foreign investors who want liquid and diversified exposure to the top 10 companies listed on the Saudi Stock Exchange:

Al Rajhi BankAlAhli Bank
Aramco - Saudi Arabian OilSaudi Arabian Mining
SABICSaudi Telecom
Riyad BankAlinma Bank
Saudi ElectricityBank Albilad

Why invest in SABIC Stock via KSA? 

The iShares MSCI Saudi Arabia ETF seeks to track the investment results of a broad-based index composed of Saudi Arabian equities. With net assets of almost $1B, The iShares MSCI Saudi Arabia ETF (KSA) is the largest exchange-traded fund that seeks to track the investment results of an index composed primarily of frontier market equities along with select emerging market equities.

  1. Access to the Saudi Arabian stock market, which has historically been closed to foreign investors. 
  2. Targeted exposure to a country with growth potential. with One click accesses to a virtually untapped investment portfolio, including Saudi Stock Exchange and TASI index exposure. 
  3. Use to seek long-term growth and diversification.

How to Get Started with CAPEX.com 

Here is how to buy and trade stocks, ETFs and other assets with an international, highly regulated broker like CAPEX.com: 

  • Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold shares, open an Invest account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a trading account. 
  • Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity. 
  • Fund your account with fiat money. Before buying and trading stocks and ETFs, you need to fund your exchange account with U.S. dollars, Euros, or other currencies. 
  • Place your order. Click on the "Search" icon located in the left panel or by clicking on "ETFs" and then select the instrument, such as "iShares MSCI Saudi Arabia ETF”.

    

When trading stocks, the derivatives are stored in your account and are more liquid than the underlying asset.  

However, you should be aware that leveraged trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading derivatives. There are margins you need to maintain; if you cannot cover reductions in values, your position might be closed, and you'll have to meet the loss no matter what subsequently happens to the underlying asset. 

With CAPEX, you can trade CFDs on +2.000 stocks and invest in +5.000 stocks and ETFs with ownership. 

Free trading tools and resources 

Before you start investing in shares, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free trading courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a more informed trader. 

Our demo account is a great place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how leveraged trading work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading.  

Sources: 

SABIC - Corporate Profile 

Saudi Basic Industries Corporation (SASE:2010) Stock Valuation - Simply Wall St 

Saudi Basic Industries Corporation (2010.SR) Stock Price, News, Quote & History - Yahoo Finance 

Saudi Basic Industries Stock Forecast: 2010 Stock Price Prediction, Long-Term; Short-Term Share Revenue -  Walletinvestor 

FAQs about SABIC Stock Shares

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